* It is an obligatory act ordained by Allah (The Glorified and Exalted) to be performed by every adult and able bodied Muslim.

* It is levied on specific assets only, identified by Shariah (Islamic Law) as assets having the potential for growth.

* It is a part of the wealth and property that Muslims must pay annually, to help the poor of their community.

* It is levied at the rate of 2.5% each
year (calculated according to the lunar calendar) on the market value of
the Zakat-able assets after deducting therefrom specified liabilities.

* The compulsory transfer of ownership of
a portion of the property of the giver, calculated at the rate of 2.5%
as aforesaid, to a poor and needy Muslim who qualifies to receive Zakat
according to the Shariah.

* It is an Ibada'h (worship) and not a
tax, Obligatory on every Muslim who owns Nisab viz. 613.35 grams of
silver, or 87.49 grams of gold or who owns one or more assets liable to
Zakat, equal in value to 613.35 grams of silver or 87.49 grams of gold.

2.0. What is the meaning of Zakat? Zakat literally means "to be clear, to
grow, to increase." It comes from the root letters za, kaf, ya, which
has several meanings: to be clean, to pay the obligatory charity, to be
pure, innocent, to be better in purity, and to praise oneself, to
justify. It has been used in the Quran to mean all of these things. It
can also be considered a form of sadaqah (charity), given to the poor.

3.0 What is Nisab? The amount of wealth which makes one liable for Zakat is called Nisab

4.0 How do I know that I do have Nisab?If a person has gold equal to 20
mithqaals or 87.49 grams or silver 200 dirhaams or 613.35 grams or cash
equivalent or in combination all of the above then one has to give
Zakat. These amounts of gold and silver are taken from a Hadith of
Prophet (PBUH).Considering value of 613.35 gram silver
is less than 87.49 grams of gold, scholars calculate the Nisab based on
silver value (to benefit poor), hence if a person has approximately 31,635 rupees equivalent (June 30, 2010 silver value) for one lunar calendar,
then the person should pay Zakat.

5.0 Who is entitled to receive Zakat?

There are eight groups of people on whom Zakat
should be spent, as mentioned in the Quran: "The alms are only for the
Fuqara' (the poor), and Al-Masakin (the needy) and those employed to
collect (the funds); and to attract the hearts of those who have been
inclined (towards Islam); and to free the captives; and for those in
debt; and for Allah's Cause, and for the wayfarer (a traveler who is cut
off from everything); a duty imposed by Allah. And Allah is All-Knower,
All-Wise." [Al-Quran 9:60] *Fuqaraa: Those who own property in excess of basic necessities but below the value of Nisab.

*Masakeen: Persons of extreme poverty who possess no wealth whatsoever.

*Aamileen: (Zakat collector) Those
persons who are appointed by an Islamic Head of State or Government to
collect Zakat. It is not necessary that this be a needy person.

*Muallafatul Quloob: Those poor and needy
persons who are given Zakat with the intentions of solidifying their
hearts because they maybe recently converted to Islam or to bring them
closer to Islam.

*Ar-Riqaab: slaves whose masters have agreed to set them free on a payment of a fixed amount. Zakat may be used to purchase their freedom.

*Ibnus-Sabeel: A traveler, who, whilst wealthy at his residence, is stranded and in need of financial assistance.

*Al Ghaarimeen: A person whose debts
exceeds his assets and his net assets (after deducting his liabilities)
is below the Nisab limit. To determine whether a person qualifies, his
basic necessities of life (house, furniture, clothes, vehicle, etc.)
will not be taken into account. It is conditional that the debts were
not created for any un-Islamic or sinful purpose.

*Fi Sabeelillah: Those who are
away from home in the path of Allah. Those in Jihaad, those seeking
knowledge or a stranded Haji may be assist with Zakat if they are in
need.

6.0 Who cannot be given Zakat?*Zakat cannot be given to parents,
grandfather, etc., or to one's children and grandchildren. A husband
and wife cannot give Zakat to each other.

*Zakat contributions cannot be given to such
institutions or organizations who do not give the rightful recipients
(Masaarif) possession of Zakat, but instead use Zakat funds for
construction, investment or salaries.

*Zakat cannot be given to non-Muslims. The same
ruling applies to Waajib Sadaqah (charity), i.e., Sadaqatul Fitr,
Kaffarah, Ush'r and Naz'r. Naf'l Sadaqah could be given to non-Muslims.

*If one cannot determine whether the recipient
is needy or not, then it is better to make certain before giving him
Zakat. If Zakat is given without inquiry and subsequently it is known
that the recipient is wealthy the Zakat is not valid. It has to be given
again.

*Zakat will not be fulfilled by purchasing books for an institution, or land purchased for public utility and made Wak'f.

*Zakat cannot be used for the Kaf'n of a deceased person who has no heirs, because at that time he/she cannot become the owner.

*A dead person's debt cannot be paid from Zakat.

7.0 How should I Calculate Zakat?The general principle is that one
year must elapse over the Zakat-able property in order to render it
liable to Zakat. This is subject to a qualification: where a person has
Nisab of a particular class of Zakat-able property and during the course
of the Zakat year acquires property of the same class from any source
whatsoever, then the property so acquired is added to the existing
Zakat-able property of the same class and Zakat is payable on the whole,
or the remainder thereof, at the end of that Zakat year without
calculating a separate Zakat year for each such separate acquisition.
For example, a person has cash of $5,000 and during the course of the
Zakat year receives a further sum of $10,000 by way of a gift. He must
pay Zakat on the sum of $15,000 at the end of that Zakat year and a new
year would not be calculated in respect of the subsequent acquisition of
$5,000.

Figure 1.1In this graph, $3,000 is the amount of
wealth owned in Ramadan. This amount exceeds nisab (calculated according
to the nisab of silver.) During the year it decreases but does not go
below nisab. In this case, Ramadan will be counted as the beginning of
the relevant lunar year and Zakat will be due on the amount of wealth in
possession during next Ramadan, which is $6,000.

Figure 1.2In this graph, $3,000 is the amount of
wealth owned in Ramadan. This amount exceeds nisab. During the year the
amount decreases, then increases to $6,000. Then, wealth decreases again
before increasing to $4,000. Despite these fluctuations, the amounts do
not go below nisab. Hence, the relevant Zakat year will begin in
Ramadan and Zakat will be due on the amount of wealth in next Ramadan,
which is $4,000.

Figure 1.3In this graph, $3,000 is the amount of
wealth owned in Ramadan, which exceeds nisab. During the year it
fluctuates - sometimes going below or above nisab. The individual’s
relevant lunar year however only begins once the wealth goes above nisab
in the month of Safar and remains above that for one complete year
until next Safar. Hence, Zakat will be due in Safar on the complete
amount, which is $6,000.

8.0 Where can I find the historical price of Gold to calculate my Zakat?

Kindly visit the following the link to find out daily and historical prices of Gold: Gold Price History

The sister organization of Hidaya Trust, Hidaya Foundation was awarded Sitara-i-Eisaar (Star of Sacrifice) by the Government of Pakistan, in recognition of the results-oriented relief efforts of both the organizations during the 2005 earthquake in Pakistan. It was awarded during a special ceremony held at the Embassy of Pakistan in Washington, DC.

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